Income Tax (Trading and Other Income) Act 2005 section 711

Identification of shares after disposals

Section 711 sets out the rules for identifying which shares in a venture capital trust (VCT) are treated as being disposed of when an investor sells some of their holding.

• When an investor holds both VCT shares and non-VCT shares in the same company, any non-VCT shares are treated as disposed of first.
• Where VCT shares include both shares within the annual acquisition limit and excess shares beyond that limit, shares acquired on an earlier day are treated as disposed of before those acquired on a later day.
• If VCT shares were acquired on the same day, any excess shares (those exceeding the annual acquisition limit) are treated as disposed of first.
• Shares acquired or disposed of through a nominee are treated as acquired or disposed of by the individual directly, and transfers between the individual and their nominee are ignored.